Bitcoin’s BTC$69,785.25 rebound from last week’s selloff is already running into a wall.

After briefly sliding into the low-$60,000s in a capitulation-style move last week, the largest cryptocurrency snapped back toward the $70,000 level over the weekend but momentum has since faded.

That stall has traders re-framing the bounce as a classic bear-market pattern a sharp relief rally that draws in dip buyers, only to meet a wave of supply from investors looking to exit at better prices.

“There is still a huge supply in the markets from those who want to exit the first cryptocurrency on the rebound,” FxPro chief market analyst Alex Kuptsikevich said in an email. “In such conditions, it is worth being prepared for a new test of the 200-week moving average soon.”

“We remain very sceptical about the near future, as the recovery momentum lost steam over the weekend, encountering a sell-off near the $2.4T level. Perhaps we have only seen a bounce on the way down, which is not yet complete,” he added.

Sentiment data paints a similarly fragile picture. The Crypto Fear and Greed Index sank to 6 over the weekend to reach the same levels as an FTX-led 2022 downturn, before recovering to 14 by late Monday.

Kuptsikevich said those readings remain “too low levels for confident purchases,” arguing the shift reflects more than temporary nerves.

Liquidity conditions are adding to the unease. With thinner order books, modest sell pressure can produce outsized moves, which then triggers additional stop-outs and liquidations a feedback loop that makes price action feel disorderly.

That dynamic, rather than a single headline, can explain why bitcoin can swing thousands of dollars in a session while still failing to break through key resistance.

A Kaiko note on Monday described the backdrop as a broader risk-off unwind. It said aggregate trading volumes across major centralized exchanges have declined by roughly 30% since October and November, with monthly spot volumes dropping from around $1 trillion to the $700 billion range.

The firm said that although last week saw a few sharp bursts of trading, the broader trend has been a steady drop in participation. That points to traders, particularly retail investors, gradually leaving the market rather than being forced out all at once.

When liquidity thins like this, prices can slide quickly on relatively modest selling pressure, without the kind of heavy, panic-driven volume that usually signals a clear capitulation and a durable bottom.

Kaiko also framed the move within the familiar four-year halving cycle logic. Bitcoin peaked around $126,000 in late 2025/early 2026 and has since retraced sharply, with the pullback into the $60,000-$70,000 zone representing a roughly 50%-plus drawdown from the highs.

Historically, those bottoms can take months to develop and often feature multiple failed rallies.

For now, bitcoin’s ability to hold the $60,000 area is the key tell. If buyers continue to defend it, the market may settle into a choppy consolidation. If not, the same thin-liquidity dynamics that fueled the washout could return quickly, especially if broader macro conditions stay risk-off.